UK: New research from specialist property lender ASK Partners has revealed that nearly three in five (58 per cent) HNW investors plan to significantly increase their overall investment allocation to real estate in the next year.
The research revealed that one in five (18 per cent) HNW investors plan to increase their current real estate investment risk tolerance while 17 per cent plan to decrease.
Respondents cited coliving, life sciences and warehouses and logistics as the real estate sectors that they believe are likely to generate the best returns over the next 12 months, while appetite for retail sector investments was significantly lower.
The research highlighted that the biggest challenges facing the real estate market according to HNW investors in the next 12 months include higher interest rates, changes in political leadership, increased regulation and changes to the tax system. Housing should be the number one top priority for the new government, according to 13 per cent of respondents.
Investors suggested that the top three property priority areas for the new government to enhance investment in real estate in the UK should be alleviating restrictions on conversions and brownfield sites: zoning and land use policies and incentivisation for affordable housing.
Daniel Austin, CEO and co-founder of ASK Partners, said: “Our research shows that investors plan to significantly boost their real estate investments in the next 12 months which is a really positive sign for capital investing in the sector and shows the strength of real estate debt as an asset class. The positive sentiment towards the life sciences, warehouses & logistics, and coliving sectors, is certainly a reflection on the investment prospects we are anticipating due to market demand. However, higher interest rates, political changes, increased regulation, and tax adjustments are seen as key challenges. To enhance investment, investors want to see the government focus on alleviating restrictions on conversions and brownfield sites, revising zoning and land use policies, and incentivising affordable housing.”
“Addressing these issues could help overcome planning restrictions, affordability challenges, and the shortage of a construction workforce, thus strengthening the UK’s real estate market. Housing is a pivotal election issue, linked to economic stability. Rising house prices and mortgage approvals suggest the beginnings of a recovery, but the housing shortage threatens a full turnaround. The UK faces an affordability crisis due to insufficient rental and sale properties, impacting GDP. Decades of social strain persist unresolved. Parties must present credible long-term plans, aiming for 300,000 homes annually, a target unmet since 2004. Reviving SME housebuilders, boosting skilled labour, and reforming planning are crucial,” he added.
ASK’s loan portfolio recently surpassed £1 billion.
